Monetarism is the school of thought that favors:
A) the use of import quotas and tariffs to stabilize the economy.
B) stabilizing the economy through control of the money supply.
C) the belief that the economy will operate at full employment if the money supply does not increase from year to year.
D) having the government monitor the economy and make adjustments where necessary using taxes and government expenditures.

Question

Quizplus · Accepted Answer

Monetarism, a school of thought led by economist Milton Friedman, emphasizes the role of governments in controlling the amount of money in circulation. Monetarists believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods. They argue that managing the money supply is the most effective way to regulate economic activity and control inflation.

Monetarism Is the School of Thought That Favors